The EU VAT distance selling threshold, explained

If you sell physical goods or digital products to consumers in other EU countries, one number quietly governs your VAT obligations: EUR 10,000. Cross it, and the rules about whose VAT you charge change overnight. This guide explains the EU VAT distance selling threshold — where it came from, what counts toward it, what “destination VAT” and OSS actually mean once you pass it, and the rule that catches the most people: that crossing it once obligates you for longer than the current year.

What the threshold is

Since 1 July 2021, the EU has a single, union-wide distance selling threshold of EUR 10,000 per calendar year. Below it, you may keep charging your home-country VAT rate on cross-border business-to-consumer (B2C) sales to other EU member states. Above it, you must charge VAT at your customer’s destination-country rate instead.

The EUR 10,000 figure is cumulative across the whole EU, not per country. It aggregates all your cross-border B2C sales to every other member state into one running total. A few hundred euros to Germany, a few thousand to France, a steady trickle to Ireland — they all add to the same pot.

What it replaced

Before July 2021, things worked differently. Each member state set its own distance-selling threshold — typically somewhere between EUR 35,000 and EUR 100,000 — and you tracked your sales to each country against its individual limit. You only had to register for VAT in a country once your sales to that country crossed its threshold.

That patchwork is gone. The per-country thresholds were abolished and replaced by the single EUR 10,000 pan-EU limit. The practical effect for most small sellers is that the bar is now much lower and reached much sooner, because your sales to all countries count together rather than separately.

What counts toward EUR 10,000

Only a specific slice of your sales counts:

• Cross-border B2C sales of goods to consumers in other EU member states.
• TBE digital services — telecommunications, broadcasting, and electronically supplied services — to consumers in other member states.

These do not count:

• Domestic sales (to customers in your own country).
• Sales outside the EU.
• Genuine B2B sales, where the business customer supplies a usable VAT number — those are handled under the reverse-charge mechanism, not OSS.

The amount counted is net of VAT.

”Destination VAT” and what OSS is for

Once you exceed EUR 10,000, the place of supply shifts to the customer’s country. That means a sale to a Dutch consumer is taxed at the Dutch rate, a sale to an Italian consumer at the Italian rate, and so on. This is “destination VAT”.

The obvious problem: without help, charging destination VAT could mean VAT registrations in up to 26 other countries. The One Stop Shop (OSS) scheme exists precisely to avoid that. You register for the Union OSS scheme once, in your home country, and file a single quarterly OSS return that covers your cross-border B2C VAT across all member states. One registration, one return, one payment — instead of 26.

The rule people miss: once crossed, it stays crossed

Here is the part that trips up sellers who watch their total dip back under EUR 10,000 after a few refunds. EU rules say that once you cross the threshold in a calendar year, destination VAT applies for the rest of that year — and for the whole of the next year too, regardless of where your running total ends up.

So a single busy quarter doesn’t just change how you tax sales for a few weeks; it commits you to destination VAT for the remainder of the year and all of the following year. You can only return to charging home-country VAT once your sales stay below EUR 10,000 for a full qualifying period.

A note: this is not tax advice

This article explains the general mechanics of the EU distance selling threshold and OSS. It is not tax or legal advice. VAT rules vary by situation — micro-business exceptions, mixed goods/services catalogs, special territories, and reduced rates all introduce nuance — and they change over time. Confirm your actual registration and reporting obligations with a qualified tax professional. It’s also worth knowing the limits of scope: this is the intra-EU OSS threshold. Low-value imports from outside the EU fall under a separate IOSS regime, which is a different topic entirely.

Tracking your live position in WooCommerce

The hard part isn’t understanding the rule — it’s knowing the exact moment you cross EUR 10,000, when sales arrive every day across a dozen countries. That’s what the Sellinor EU VAT One Stop Shop plugin does, and the core tracking is free.

It counts the right sales, automatically. Every WooCommerce order is classified as Domestic, Non-EU, EU B2B, or EU B2C, and only cross-border EU B2C orders count toward the threshold. For each one it tracks order total minus tax in EUR, so shipping is included and VAT is not. Place of supply follows the EU rules: digital orders use the billing country, physical orders use the shipping country (falling back to billing). Special territories like the Canary Islands, Ceuta, Melilla, the Åland Islands, and the French overseas departments are excluded; Northern Ireland (a GB address with a BT postcode) is recognised as XI and stays in scope for goods. See order classification for the full ruleset.

It keeps a live, per-country, per-year total. A dashboard shows a color-coded progress bar, a status card, and a country-by-country breakdown, with admin notices when you are approaching (70%+) or have exceeded the threshold, and a free email alert when you reach 100% of the threshold. Refunds and status reversals are handled automatically, and the “once crossed, stays crossed” latch is built in: after a crossing, the year stays flagged as exceeded, and the following year is treated as obligated from day one — exactly matching the EU rule above. Off-platform sales (Amazon, eBay, in person) count toward the same legal limit, so you can add them as manual adjustments. Free tracking covers EUR stores; non-EUR stores need the Pro multi-currency module.

What happens after you cross is where the Pro add-on helps: it can auto-apply each member state’s standard destination VAT rate into your WooCommerce tax tables on crossing, run live VIES checks that zero-rate confirmed cross-border B2B orders, and prepare per-quarter, per-country OSS report figures you can print or export as CSV. Note that the plugin prepares these figures — it never files the return for you, and it works with standard rates only (reduced and zero rates are not handled automatically).

For a deeper walkthrough of the tracking itself, see WooCommerce EU VAT threshold tracking; for the bigger picture, what the OSS scheme is and how to set it up in WooCommerce.